Sagicor Life placed under review as Jamaica's risk rating improves
Ratings agency, AM Best, has placed under review with positive implications, the financial strength of Sagicor Life Jamaica Limited, a subsidiary of Sagicor Financial Corporation Limited.
The status is in response to the potential impact on the balance sheet, business profile, operating performance and risk-based capital metrics of Sagicor Life Jamaica Limited following the change in AM Best’s country risk assessment of Jamaica to Country Risk Tier 4, which represents a lower level of risk.
Jamaica was previously rated at Country Risk Tier 5.
AM Best currently has a financial strength rating of B++ (Good) for Sagicor Life Jamaica, and a long-term issue credit rating of “bbb”. The outlook of these ratings is stable.
In a press release, the ratings agency said Sagicor Life will remain under review while it conducts further reviews and assesses the potential impact of the change in the assessment of Jamaica on the ratings.
AM Best determines country risk levels by assessing country-specific factors that could adversely affect an insurer's ability to meet its financial obligations. Country risk is evaluated and factored into all of AM Best’s credit ratings.
Last year, AM Best upgraded the financial strength ratings to B++ from B+, and the long-term issuer credit ratings to "bbb" from "bbb-" of Sagicor Life Jamaica Limited.
Concurrently, the ratings agency affirmed the financial strength ratings of A-, and the long-term issuer credit ratings of "a-" of Sagicor Life Inc.
AM Best also affirmed the financial strength ratings of A-, and the long-term issuer credit ratings of "a-" of Sagicor General Insurance Inc and Sagicor Life Insurance Co.
According to AM Best, the ratings upgrades of Sagicor Life Jamaica reflected its strong brand recognition in the Caribbean market, favourable market position, strong earnings in its core business lines, and adequate risk-adjusted capital position.
Sagicor’s financial strength was placed under review in 2013 following the announced debt exchange programme by the Government of Jamaica, which AM Best noted was the second such programme in three years.
AM Best added that Sagicor’s significant business and financial exposure to the Jamaican economy brought some exposure to favourable performance of Sagicor Financial Corporation’s Jamaican operations, triggering the need for review.